Oil prices were flat on Tuesday. This came after rising in the previous session, on concerns that interest rate rises in the United States to tame inflation will curb economic growth and fuel demand in the world’s biggest crude consumer.
Brent crude futures for November settlement dropped 7 cents, or 0.1 percent, to $91.93 a barrel by 0136 GMT.
U.S. West Texas Intermediate crude for October delivery stood at $85.59 a barrel, down 14 cents, or 0.2 percent. The October contract will expire on Tuesday and the more active November contract stood at $85.20, inched down 16 cents, or 0.2 percent.
The dollar edged up against major currencies on Monday ahead of a slew of central bank meetings this week led by the U.S. Federal Reserve, which is likely to raise interest rates by another 75 basis points to face inflation.
“Crude prices were under pressure as fears of an aggressive central bank tightening are driving concerns for a quickly weakening global economy,” a senior market analyst at OANDA Edward Moya noted.
“The global economy is slowing and that has been troubling for the crude demand outlook.”
U.S. crude oil stocks are estimated to have risen last week by around 2 million barrels in the week to Sept. 16, according to preliminary Reuters poll on Monday.
The U.S. Energy Department will sell up to 10 million barrels of oil from the Strategic Petroleum Reserve for delivery in November. It will extend the timing of a plan to sell 180 million barrels from the stockpile to tame fuel prices.
Russia stated on Monday that unresolved problems remained in the negotiations. Moreover, France’s foreign minister added that it was up to Tehran to make a decision as the window to find a solution was closing.
Signs still that major producers can’t not meet their output quotas failed to drive prices much higher on Monday.
An internal document from OPEC+ showed the group did not get its oil production target by 3.583 million barrels per day (bpd) in August. In July, OPEC+ lost its target by 2.892 million bpd.
ANZ Research analysts pointed to the lifting of citywide lockdowns in China’s Chengdu and Dalian on Monday as a potential spark for a stronger recovery in oil demand growth in the world’s second-largest oil consumer.